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Page 1 of 4 Instructions for Form 2441
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004
Instructions for Form 2441
Child and Dependent Care Expenses
What’s New
You may be able to include
nontaxable combat pay in earned
income when figuring the amount of
dependent care benefits you can
exclude or deduct from income. For
details, see the instructions for
line 17.
Purpose of Form
If you paid someone to care for your
child or other qualifying person so
you (and your spouse if filing a joint
return) could work or look for work in
2004, you may be able to take the
credit for child and dependent care
expenses. But you must have had
earned income to do so. If you can
take the credit, use Form 2441 to
figure the amount of your credit.
If you (or your spouse if filing a
joint return) received any dependent
care benefits for 2004, you must use
Form 2441 to figure the amount, if
any, of the benefits you may exclude
from your income on Form 1040, line
7. You must complete Part III of Form
2441 before you can figure the credit,
if any, in Part II.
Definitions
Dependent Care Benefits
These include amounts your
employer paid directly to either you or
your care provider for the care of your
qualifying person(s) while you
worked. These benefits also include
the fair market value of care in a
daycare facility provided or
sponsored by your employer. Your
salary may have been reduced to pay
for these benefits. If you received
dependent care benefits as an
employee, they should be shown in
box 10 of your 2004 Form(s) W-2.
Benefits you received as a partner
should be shown in box 13 of your
Schedule K-1 (Form 1065) with
code N.
Leading adjust: 20% ❏ Draft
( 5-Nov-2004)
Qualifying Person(s)
A qualifying person is:
• Any child under age 13 whom you
can claim as a dependent (but see
Exception for Children of Divorced or
Separated Parents on this page). If
the child turned 13 during the year,
the child is a qualifying person for the
part of the year he or she was under
age 13.
• Your disabled spouse who is not
able to care for himself or herself.
• Any disabled person not able to
care for himself or herself whom you
can claim as a dependent (or could
claim as a dependent except that the
person had gross income of $3,100
or more or filed a joint return). But if
this person is your child, see
Exception for Children of Divorced or
Separated Parents on this page.
To find out who is a dependent,
see Pub. 501, Exemptions, Standard
Deduction, and Filing Information.
To be a qualifying person, the
!
CAUTION
person must have shared the
same home with you in 2004.
Exception for Children of
Divorced or Separated Parents
If you were divorced, legally
separated, or lived apart from the
other parent during the last 6 months
of 2004, you may be able to take the
credit or the exclusion even if your
child is not your dependent. If your
child is not your dependent, he or she
is a qualifying person only if all five of
the following apply.
1. You had custody of the child for
a longer time in 2004 than the other
parent. See Pub. 501 for the
definition of custody.
2. One or both of the parents
provided over half of the child’s
support in 2004.
3. One or both of the parents had
custody of the child for more than half
of 2004.
4. The child was under age 13 or
was disabled and could not care for
himself or herself.
5. The other parent claims the
child as a dependent because —
Cat. No. 10842K
❏ Ok to Print
(Init. & date)
14:59 - 5-NOV-2004
Department of the Treasury
Internal Revenue Service
a. As the custodial parent, you
signed Form 8332 or a similar
statement agreeing not to claim the
child’s exemption for 2004, or
b. Your divorce decree or written
agreement went into effect before
1985 and it states that the other
parent can claim the child as a
dependent and the other parent gave
at least $600 for the child’s support in
2004. But this rule does not apply if
your decree or agreement was
changed after 1984 to say that the
other parent cannot claim the child as
a dependent.
If this exception applies, the other
parent cannot treat the child as a
qualifying person even though the
other parent claims the child as a
dependent.
Qualified Expenses
These include amounts paid for
household services and care of the
qualifying person while you worked or
looked for work. Child support
payments are not qualified expenses.
Also, expenses reimbursed by a state
social service agency are not
qualified expenses unless you
included the reimbursement in your
income.
Household Services
These are services needed to care
for the qualifying person as well as to
run the home. They include, for
example, the services of a cook,
maid, babysitter, housekeeper, or
cleaning person if the services were
partly for the care of the qualifying
person. Do not include services of a
chauffeur or gardener.
You can also include your share of
the employment taxes paid on wages
for qualifying child and dependent
care services.
Care of the Qualifying Person
Care includes the cost of services for
the qualifying person’s well-being and
protection. It does not include the
cost of clothing or entertainment.
You can include the cost of care
provided outside your home for your
Page 2 of 4 Instructions for Form 2441
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dependent under age 13 or any other
qualifying person who regularly
spends at least 8 hours a day in your
home. If the care was provided by a
dependent care center, the center
must meet all applicable state and
local regulations. A dependent care
center is a place that provides care
for more than six persons (other than
persons who live there) and receives
a fee, payment, or grant for providing
services for any of those persons,
even if the center is not run for profit.
You can include amounts paid for
items other than the care of your child
(such as food and schooling) only if
the items are incidental to the care of
the child and cannot be separated
from the total cost. But do not include
the cost of schooling for a child in the
first grade or above. Also, do not
include any expenses for sending
your child to an overnight camp.
Medical Expenses
Some disabled spouse and
dependent care expenses may
qualify as medical expenses if you
itemize deductions on Schedule A
(Form 1040). See Pub. 503, Child
and Dependent Care Expenses, and
Pub. 502, Medical and Dental
Expenses, for details.
Who Can Take the Credit
or Exclude Dependent
Care Benefits?
You can take the credit or the
exclusion if all six of the following
apply.
1. Your filing status is single, head
of household, qualifying widow(er), or
married filing jointly. But see Married
Persons Filing Separate Returns on
this page.
2. The care was provided so you
(and your spouse if you were
married) could work or look for work.
However, if you did not find a job and
have no earned income for the year,
you cannot take the credit or the
exclusion. But if your spouse was a
student or disabled, see the
instructions for line 5.
3. You (and your spouse if you
were married) paid over half the cost
of keeping up your home. The cost
includes rent, mortgage interest, real
estate taxes, utilities, home repairs,
insurance on the home, and food
eaten at home.
4. You and the qualifying
person(s) lived in the same home.
5. The person who provided the
care was not your spouse or a person
whom you can claim as a dependent.
If your child provided the care, he or
she must have been age 19 or older
by the end of 2004.
6. You report the required
information about the care provider
on line 1 and, if taking the credit, the
information about the qualifying
person on line 2.
Married Persons Filing
Separate Returns
If your filing status is married filing
separately and all of the following
apply, you are considered unmarried
for purposes of figuring the credit and
the exclusion on Form 2441.
• You lived apart from your spouse
during the last 6 months of 2004, and
• The qualifying person lived in your
home more than half of 2004, and
• You provided over half the cost of
keeping up your home.
If you meet all the requirements to
be treated as unmarried and meet
items 2 through 6 listed earlier, you
can take the credit or the exclusion. If
you do not meet all the requirements
to be treated as unmarried, you
cannot take the credit. However, you
can take the exclusion if you meet
items 2 through 6.
Line Instructions
Line 1
Complete columns (a) through (d) for
each person or organization that
provided the care. You can use Form
W-10, Dependent Care Provider’s
Identification and Certification, or any
other source listed in its instructions
to get the information from the care
provider. If you do not give correct or
complete information, your credit (and
exclusion, if applicable) may be
disallowed unless you can show you
used due diligence in trying to get the
required information.
Due Diligence
You can show a serious and earnest
effort (due diligence) to get the
information by keeping in your
records a Form W-10 completed by
the care provider. Or you may keep
one of the other sources of
information listed in the instructions
for Form W-10. If the provider does
not give you the information,
complete the entries you can on
line 1. For example, enter the
provider’s name and address. Enter
“See Page 2” in the columns for
which you do not have the
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14:59 - 5-NOV-2004
information. Then, on the bottom of
page 2, explain that the provider did
not give you the information you
requested.
Columns (a) and (b)
Enter the care provider’s name and
address. If you were covered by your
employer’s dependent care plan and
your employer furnished the care
(either at your workplace or by hiring
a care provider), enter your
employer’s name in column (a). Next,
enter “See W-2” in column (b). Then,
leave columns (c) and (d) blank. But if
your employer paid a third party (not
hired by your employer) on your
behalf to provide the care, you must
give information on the third party in
columns (a) through (d).
Column (c)
If the care provider is an individual,
enter his or her social security
number (SSN). Otherwise, enter the
provider’s employer identification
number (EIN). If the provider is a
tax-exempt organization, enter
“Tax-Exempt” in column (c).
Column (d)
Enter the total amount you actually
paid in 2004 to the care provider.
Also, include amounts your employer
paid to a third party on your behalf. It
does not matter when the expenses
were incurred. Do not reduce this
amount by any reimbursement you
received.
Line 2
Complete columns (a) through (c) for
each qualifying person. If you have
more than two qualifying persons,
attach a statement to your return with
the required information. Be sure to
put your name and social security
number (SSN) on the statement.
Also, enter “See Attached” on the
dotted line next to line 3.
Column (a)
Enter each qualifying person’s name.
Column (b)
You must enter the qualifying
person’s SSN. Be sure the name and
SSN entered agree with the person’s
social security card. Otherwise, at the
time we process your return, we may
reduce or disallow your credit. If the
person was born and died in 2004
and did not have an SSN, enter
“Died” in column (b) and attach a
copy of the person’s birth certificate.
To find out how to get an SSN, see
Social Security Number (SSN) on
page 16 of the Form 1040
Page 3 of 4 Instructions for Form 2441
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instructions. If the name or SSN on
the person’s social security card is
not correct, call the Social Security
Administration at 1-800-772-1213.
Column (c)
Enter the qualified expenses you
incurred and paid in 2004 for the
person listed in column (a). Prepaid
expenses are treated as paid in the
year the care is provided. Do not
include in column (c) qualified
expenses:
• You incurred in 2004 but did not
pay until 2005. You may be able to
use these expenses to increase your
2005 credit.
• You incurred in 2003 but did not
pay until 2004. Instead, see the
instructions for line 9 on this page.
• You prepaid in 2004 for care to be
provided in 2005. These expenses
can only be used to figure your 2005
credit.
If you paid qualified expenses
TIP for the care of two or more
qualifying persons, the $6,000
limit does not need to be divided
equally. For example, if you paid and
incurred $2,500 of qualified expenses
for the care of one qualifying person
and $3,500 for the care of another
qualifying person, you can use the
total, $6,000, to figure the credit.
Line 4
Earned income for figuring the credit
includes the following amounts. If
filing a joint return, figure your and
your spouse’s earned income
separately.
1. The amount shown on Form
1040, line 7, minus (a) any amount
included for a scholarship or
fellowship grant that was not reported
to you on a Form W-2, (b) any
amount also reported on Schedule
SE (Form 1040) because you were a
member of the clergy or you received
$108.28 or more of church employee
income, and (c) any amount received
as a pension or annuity from a
nonqualified deferred compensation
plan or a nongovernmental section
457(b) plan. This amount may be
reported in box 11 of your Form W-2.
If you received such an amount but
box 11 is blank, contact your
employer for the amount received as
a pension or annuity.
2. The amount shown on
Schedule SE, line 3, minus any
deduction you claim on Form 1040,
line 30. If you use either optional
method to figure self-employment tax,
subtract any deduction you claim on
Form 1040, line 30, from the total of
the amounts shown on Schedule SE,
Section B, lines 3 and 4b. If you
received church employee income of
$108.28 or more, subtract any
deduction you claim on Form 1040,
line 30, from the total of the amounts
shown on Schedule SE, Section B,
lines 3, 4b, and 5a.
3. If you are filing Schedule C or
C-EZ (Form 1040) as a statutory
employee, the amount shown on line
1 of the schedule.
4. Certain nontaxable earned
income such as meals and lodging
provided for the convenience of your
employer and nontaxable combat
pay. See Pub. 503 for details.
You must reduce your earned
! income by any loss from
self-employment.
CAUTION
Special Situations
If you are filing a joint return,
disregard community property laws. If
your spouse died in 2004 and had no
earned income, see Pub. 503. If your
spouse was a student or disabled in
2004, see the instructions for line 5.
Line 5
Spouse Who Was a Student or
Disabled
Your spouse was a student if he or
she was enrolled as a full-time
student at a school during any 5
months of 2004. A school does not
include a night school or
correspondence school. Your spouse
was disabled if he or she was not
capable of self-care. Figure your
spouse’s earned income on a
monthly basis.
For each month or part of a month
your spouse was a student or was
disabled, he or she is considered to
have worked and earned income. His
or her earned income for each month
is considered to be at least $250
($500 if more than one qualifying
person was cared for in 2004). If your
spouse also worked during that
month, use the higher of $250 (or
$500) or his or her actual earned
income for that month. If, in the same
month, both you and your spouse
were either students or disabled, only
one of you can be treated as having
earned income in that month.
For any month that your spouse
was not a student or disabled, use
your spouse’s actual earned income if
he or she worked during the month.
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14:59 - 5-NOV-2004
Line 9
Credit for Prior Year’s
Expenses
If you had qualified expenses for
2003 that you did not pay until 2004,
you may be able to increase the
amount of credit you can take in
2004. To figure the credit, see the
worksheet under Amount of Credit in
Pub. 503. If you can take a credit for
your 2003 expenses, enter the
amount of the credit and “CPYE” on
the dotted line next to line 9. Also,
enter the name and social security
number of the person for whom you
paid the prior year’s expenses to the
right of this amount. Then, add the
credit to the amount on line 9 and
replace the amount on line 9 with that
total. Also, attach a statement
showing how you figured the credit.
Line 13
If you had a flexible spending
account, any amount included on line
12 that you did not receive because
you did not incur the expense is
considered forfeited. Enter the
forfeited amount on line 13. Do not
include amounts you expect to
receive at a future date.
Example. Under your employer’s
dependent care plan, you chose to
have your employer set aside $5,000
to cover your 2004 dependent care
expenses. The $5,000 is shown in
box 10 of your Form W-2. In 2004,
you incurred and were reimbursed for
$4,950 of qualified expenses. You
would enter $5,000 on line 12 and
$50, the amount forfeited, on line 13.
Line 15
Enter the total of all qualified
expenses incurred in 2004 for the
care of your qualifying person(s). It
does not matter when the expenses
were paid.
Example. You received $2,000 in
cash under your employer’s
dependent care plan for 2004. The
$2,000 is shown in box 10 of your
Form W-2. Only $900 of qualified
expenses were incurred in 2004 for
the care of your 5-year-old dependent
child. You would enter $2,000 on line
12 and $900 on line 15.
Line 17
Earned income for figuring the
amount of dependent care benefits
you are able to exclude or deduct
from your income includes the
following amounts. If filing a joint
Page 4 of 4 Instructions for Form 2441
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return, figure your and your spouse’s
earned income separately.
1. The amount shown on Form
1040, line 7, minus (a) any amount
included for a scholarship or
fellowship grant that was not reported
to you on a Form W-2, (b) any
amount also reported on Schedule
SE (Form 1040) because you were a
member of the clergy or you received
$108.28 or more of church employee
income, and (c) any amount received
as a pension or annuity from a
nonqualified deferred compensation
plan or a nongovernmental section
457(b) plan. This amount may be
reported in box 11 of your Form W-2.
If you received such an amount but
box 11 is blank, contact your
employer for the amount received as
a pension or annuity.
2. The amount shown on
Schedule SE, line 3, minus any
deduction you claim on Form 1040,
line 30. If you use either optional
method to figure self-employment tax,
subtract any deduction you claim on
Form 1040, line 30, from the total of
the amounts shown on Schedule SE,
Section B, lines 3 and 4b. If you
received church employee income of
$108.28 or more, subtract any
deduction you claim on Form 1040,
line 30, from the total of the amounts
shown on Schedule SE, Section B,
lines 3, 4b, and 5a.
3. If you are filing Schedule C or
C-EZ (Form 1040) as a statutory
employee, the amount shown on line
1 of the schedule.
4. Nontaxable combat pay, if you
elect to include it in earned income.
However, including this income will
only give you a larger exclusion or
deduction if your (or your spouse’s)
other earned income is less than the
amount entered on line 16. To make
the election, include all of your
nontaxable combat pay in the amount
you enter on line 17 (line 18 for your
spouse if filing jointly). But this
election cannot be made on the
return of a taxpayer whose tax year
ended before October 5, 2004, due to
his or her death. The amount of your
nontaxable combat pay should be
shown in box 14 of Form(s) W-2 with
code Q.
For purposes of line 17,
! earned income does not
CAUTION include any dependent care
benefits shown on line 12.
You must reduce your earned
!
CAUTION
income by any loss from
self-employment.
Special Situations
If you are filing a joint return,
disregard community property laws. If
your spouse died in 2004 and had no
earned income, see Pub. 503. If your
spouse was a student or disabled in
2004, see the instructions for line 5.
Line 18
If your filing status is married filing
separately, see Married Persons
Filing Separate Returns on page 2.
Are you considered unmarried under
that rule?
❏ Yes. Enter your earned income
(from line 17) on line 18. On
line 22, enter $5,000.
❏ No. Enter your spouse’s earned
income on line 18. If your spouse
was a student or disabled in 2004,
see the instructions for line 5. On
line 22, enter $2,500.
Line 23
Include your deductible benefits in the
total entered on Schedule C, line 14;
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14:59 - 5-NOV-2004
Schedule E, line 18 or line 28; or
Schedule F, line 17; whichever
applies.
Paperwork Reduction Act Notice.
We ask for the information on this
form to carry out the Internal
Revenue laws of the United States.
You are required to give us the
information. We need it to ensure that
you are complying with these laws
and to allow us to figure and collect
the right amount of tax.
You are not required to provide the
information requested on a form that
is subject to the Paperwork Reduction
Act unless the form displays a valid
OMB control number. Books or
records relating to a form or its
instructions must be retained as long
as their contents may become
material in the administration of any
Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by Internal
Revenue Code section 6103.
The time needed to complete and
file this form will vary depending on
individual circumstances. The
estimated average time is:
Recordkeeping, 33 min.; Learning
about the law or the form, 22 min.;
Preparing the form, 52 min.; and
Copying, assembling, and sending
the form to the IRS, 31 min.
If you have comments concerning
the accuracy of these time estimates
or suggestions for making this form
simpler, we would be happy to hear
from you. See the Instructions for
Form 1040.